Market Roundup
•Canada Apr Trade Balance -1.05B,-1.20B forecast, -2.28B previous
•US Imports 338.20B,327.00B previous
•US Exports 263.70B,257.60B previous
•US Jobless Claims 4-Week Avg. 222.25K,222.50K previous
•US Continuing Jobless Claims 1,792K, 1,790K forecast,1,791K previous
•US Initial Jobless Claims 222.25K,220K forecast, 219K previous
•Canada Apr Exports 64.45B,62.56B previous
•US Apr Trade Balance -74.60B,-76.20B forecast,-69.40B previous
•US Unit Labor Costs (QoQ) (Q1) 4.0%,4.7% forecast,0.4% previous
•Canada May Ivey PMI n.s.a 59.1, 65.7 previous
•Canada May Ivey PMI 52.0, 65.2 forecast,63.0 previous
•US Atlanta Fed GDPNow (Q2) 2.6%, 1.8% forecast,1.8% previous
Looking Ahead Economic Data(GMT)
•03:00 China May Trade Balance 510.00B forecast, 513.45B previous
•03:00 China May Trade Balance (USD) 70.50B forecast, 72.35B previous
•03:00 China May Imports (YoY )4.2% forecast, 8.4% previous
•03:00 China May Exports (YoY) 6.0% forecast,1.5% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro edged higher against dollar on Thursday after a widely anticipated European Central Bank rate cut.The European Central Bank cut interest rates for the first time in five years on Thursday but kept investors in the dark about its next move given increasing uncertainty over inflation after a sharp slowdown in the past year.The ECB lowered its record-high deposit rate by 25 basis points to 3.75%, joining the central banks of Canada, Sweden and Switzerland in starting to unwind some of the steepest rate hikes used to tame a post-pandemic inflation surge. Economists see another two rate cuts from the ECB this year, most likely in September and December, while markets are pricing in between one and two more moves a big change from the start of the year, when more than five cuts were anticipated. The euro rose 0.17% to $1.0887, approaching the 2-1/2 month peak of $1.0916 hit earlier in the week. Immediate resistance can be seen at 1.0919(23.6%fib), an upside break can trigger rise towards 1.0940(Higher BB).On the downside, immediate support is seen at 1.0870(38.2% fib), a break below could take the pair towards 1.0848(50% fib).
GBP/USD: The pound softened versus the euro on Thursday ahead of a European Central Bank meeting and after data showed a fall in British businesses' expectations for wage growth in the coming year. The main British macro news of the day was the release of a Bank of England survey showing British businesses' expectations for wage growth over the coming year fell sharply last month to 4.1% in May from 4.6% in April, while on a three-month average basis, the measure fell to 4.5% from 4.8%.Both were the lowest since the current series started in May 2022, and may ease policymakers' worries that it will be hard to keep inflation on target and make it easier for them to cut interest rates.Market pricing currently reflects expectations of one or two 25 basis point Bank of England rate cuts this year, with the first most likely to come in September. Immediate resistance can be seen at 1.2817 (23.6%fib), an upside break can trigger rise towards 1.2856(38.2% fib).On the downside, immediate support is seen at 1.2734(38.2%fib), a break below could take the pair towards 1.2668(50% fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Thursday as oil prices rose and data showed some narrowing in Canada's trade deficit, while investors awaited the release of monthly jobs reports for the U.S. and Canada. Data due on Friday is expected to show Canada's economy adding 22,500 jobs in May and the unemployment rate ticking up to 6.2% from 6.1%. U.S. jobs data for May is also due, expected to show an increase of 185,000. Canada posted a smaller-than-expected merchandise trade deficit of C$1.05 billion ($765 million) in April, as energy and gold helped exports grow faster than imports, data showed.The price of oil, one of Canada's major exports, was up 2.2% at 75.67 a barrel as the European Central Bank cut interest rates for the first time in roughly five years. Immediate resistance can be seen at 1.3678 (50%fib), an upside break can trigger rise towards 1.3713 (61.8%fib).On the downside, immediate support is seen at 1.3638 (38.2%fib), a break below could take the pair towards 1.3598(23.6%fib).
USD/JPY: The U.S. dollar steadied against yen on Thursday ahead of Friday's U.S. employment data that could help the Federal Reserve set a timetable for easing. Ahead of Friday's U.S. jobs report, investors are grappling with the implications for the Fed of several other pieces of U.S. data this week showing employment growth moderating, albeit along with a pick up in service sector activity.The Federal Open Market Committee meets next week but is not expected to lower rates yet. Markets are pricing in two 25 basis points Fed cuts this year, with the first most likely in September.Strong resistance can be seen at 157.02(23.6%fib), an upside break can trigger rise towards 157.87(Higher BB).On the downside, immediate support is seen at 154.93(38.2% fib), a break below could take the pair towards 153.35 (50%fib).
Equities Recap
European shares closed higher on Thursday, boosted by banking, technology and healthcare stocks, though they finished below session highs after the European Central Bank cut lending rates for the first time since 2019 but left the timing of future moves unclear.
UK's benchmark FTSE 100 closed up by 0.47 percent, Germany's Dax closed up by 0.38 percent, France’s CAC closed up by 0.42 percent.
The S&P 500 and Nasdaq composite finished a shade lower on Thursday ahead of a key labor market report, retreating from record highs reached in the previous session.
Dow Jones was up by 0.20% , S&P 500 was down by 0.02% percent, Nasdaq was up by 0.10% percent.
Commodities Recap
Gold prices hit a two-week high on Thursday on signs of a cooling U.S. labour market, strengthening a case for a September interest rate cut by the Federal Reserve, while investors positioned for U.S. non-farm payrolls data.
Spot gold was up 0.2% at $2,359.80 per ounce as of 1102 GMT, after hitting a two-week high. It rose 1% on Wednesday. U.S. gold futures rose 0.1% to $2,378.80.
Oil settled up 2% on Thursday after the European Central Bank opted to cut interest rates, spurring hopes that the Fed will follow suit, and OPEC+ ministers reassured investors the latest oil output agreement could change depending on the market.
Brent crude futures settled $1.46 higher or 1.86% at $79.87 a barrel. U.S. West Texas Intermediate crude futures settled up $1.48 or 2% at $75.55.
